IBA: Qualifying trade: Meaning thereof

CAA01/S274

Manufacturing or processing is manufacturing goods or materials CA32210, or subjecting goods or materials to a process CA32213

Storage

Storage is a trade consisting in storing goods or materials:

1. which are to be used in the manufacture of other goods or materials, or
2. which are to be subjected to a process in the course of a trade,
3. which, having been manufactured or produced or subjected to a process in the course of a trade, have not yet been delivered to any purchaser, or
4. on their arrival in the UK from a place outside the UK [CA32224](https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca32224). | | Agricultural contracting | Agricultural contracting [CA32225 ](https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca32225)is a trade consisting in:
1. ploughing or cultivating land occupied by another person, or
2. carrying out any other agricultural operation on land occupied by another person, or
3. threshing the crops of another person. | | Foreign plantation | A foreign plantation is a trade consisting in working land outside the UK for the purposes of husbandry, forestry or the growing or harvesting of crops [CA32226](https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca32226). | | Fishing | Fishing is a trade consisting in catching or taking fish or shellfish [CA32227](https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca32227). | | Mineral extraction | Mineral extraction is a trade consisting in working a source of mineral deposits [CA32228](https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca32228). |

Table B (undertakings which are qualifying trades)

Definition

Electricity undertaking

An electricity undertaking is an undertaking for the generation, transformation, conversion, transmission or distribution of electrical energy.

Water undertaking

A water undertaking is an undertaking for the supply of water for public consumption.

Sewerage undertaking

A sewerage undertaking is an undertaking for the provision of sewerage services within the meaning of the Water Industries Act 1991

Construction expenditure does not qualify under this heading unless it was incurred after the end of 1956-57

Highway undertaking

Hydraulic power undertaking

A hydraulic power undertaking is an undertaking for the supply of hydraulic power.

Professions and vocations are not trades and so they cannot be qualifying trades.

A trade does not need to be within the charge to tax to be a qualifying trade. For example, a charity may rent a building in which it makes goods to sell in its shops. The charity is exempt from tax but the manufacture of goods is still a qualifying trade and so the landlord of the building can claim IBA.